1968 (5) TMI 45 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Meaning and completion of composition of an offence under section 31 of the Mysore Sales Tax Act.
2. Whether the composition is complete only upon actual payment of the compounding fee.
3. The right of the authority to call for payment of the composition amount if not paid.
4. Whether the composition amount is recoverable under sub-section (3) of section 13 of the Act.

Issue-wise Detailed Analysis:

1. Meaning and Completion of Composition of an Offence Under Section 31 of the Mysore Sales Tax Act:
The principal point for consideration is the exact meaning to be assigned to the composition of the offence within the framework of section 31 of the Act and at what point of time the composition may be said to have become complete. The essential principles governing the idea of compounding offences as known to the law of criminal procedure are well-known. Compounding of an offence or composition of an offence otherwise than by regular punishment is a matter of agreement between the offender and the aggrieved party which the law permits them to arrive at in substitution of actual imposition of the punishment prescribed by law. According to the relevant provisions of the Code of Criminal Procedure, composition of an offence means an acquittal in the eye of the law.

2. Whether the Composition is Complete Only Upon Actual Payment of the Compounding Fee:
The argument put forth by Mr. Srinivasan is that an offence can be considered to have been compounded only when the prescribed authority accepts a certain sum of money by way of composition of the offence, and the expression "accept money" means actual physical receipt of the money. However, the judgment clarifies that depending upon the context, the word "accept" may mean "to take or receive what is offered"; "to take or receive as adequate"; "to take or receive with a consenting mind"; "to take upon oneself as a responsibility." In the context of composition of an offence, it may and should reasonably be regarded as indicating that the satisfaction received or agreed to be received is as sufficient a satisfaction as actual punishment or as a sufficiently satisfactory substitute for punishment. Therefore, the composition within the meaning of section 31 of the Sales Tax Act would be complete when the prescribed authority and dealer have agreed that a certain sum of money if paid by the dealer will be regarded by the prescribed authority as a payment by way of composition.

3. The Right of the Authority to Call for Payment of the Composition Amount if Not Paid:
The judgment holds that once there is an agreement between the authority and the dealer, binding on both of them, it is enforceable by each of them against the other. The dealer can resist any attempt on the part of the department to prosecute him, and the department can enforce payment of the composition amount by the dealer. This interpretation ensures that the agreement reached is binding and cannot be unilaterally rescinded by either party.

4. Whether the Composition Amount is Recoverable Under Sub-section (3) of Section 13 of the Act:
The judgment concludes that the composition amount in such circumstances becomes an amount due under the Act from the dealer because it is an amount which by reason of the relevant provisions of the Act and the exercise of the power thereunder he becomes liable to pay. It can therefore rightly be recovered by taking action under sub-section (3) of section 13 of the Act. The civil revision petition is dismissed, and the petitioner is given time to pay till the end of June.

Conclusion:
The court holds that the composition of an offence under section 31 of the Mysore Sales Tax Act is complete when the prescribed authority and the dealer agree on the composition amount, and this agreement is binding and enforceable. The composition amount becomes due under the Act and is recoverable under sub-section (3) of section 13 of the Act. The petition is dismissed, and the petitioner is granted time to pay the composition amount.